Laying down markers for transport reform

President Barack Obama is interested in a “comprehensive, robust” surface transportation bill, but remains dead set against a fuel tax increase to fund needed infrastructure repair and improvements, Transportation Secretary Ray LaHood said March 3.

LaHood said the president instructed him during a recent one-on-one meeting “to try and find a bipartisan way to get the money” to pay for a multiyear spending plan for highway and transit programs as well as rail initiatives.

“I know it’s easy for people who are not elected to talk about raising the gas tax. But in a bad economy when unemployment is just below 10 percent, we are not going to be talking about raising the gas tax,” LaHood declared to state transportation chiefs at a recent conference in Arlington, Va.

The SAFETEA-LU authorizing legislation for surface transportation programs expired at the end of September and the Department of Transportation and states that receive aid for maintenance, construction and safety programs have operated under four short-term funding extensions -- the most recent enacted March 2.

Transportation interests are pushing for a six-year transportation reauthorization bill that reforms existing programs and identifies new revenue sources for the beleaguered Highway Trust Fund. Congress had to bail out the fund in 2008 and 2009 with infusions from the Treasury’s general fund because authorized expenditures now exceed revenues from user fees. The economic crisis led to a downturn in taxes on commercial truck purchases and gas tax receipts fell as drivers cut back trips and favored more fuel-efficient vehicles.

A jobs bill pending in the Senate would provide an additional $19.5 billion to stabilize the trust fund for another year.

LaHood praised the $450 billion transportation plan proposed last year by Rep. James Oberstar, chairman of the House Transportation and Infrastructure Committee, as a good starting point that addresses infrastructure needs and the administration’s push for livable communities that rely less on automobiles.

Senate Majority Leader Harry Reid has indicated he wants to bring a transportation bill up for a vote this year, but many Capitol Hill observers remain skeptical that enough lawmakers will support revenue increases during an election year.

Transportation experts say a long-term highway reauthorization plan can’t succeed without presidential leadership. LaHood indicated at a Senate hearing last week that the administration doesn’t expect to offer its detailed proposal until the fall.

Meeting with reporters after his presentation to state officials, LaHood said the department would issue within 90 days a broad set of principles to help guide lawmakers drafting a comprehensive bill.

Last year, the DOT pushed for an 18-month extension of funding at levels specified in SAFETEA-LU, saying it was preoccupied during the first nine months in office on implementing the $48 billion in grants from the stimulus bill, the Cash-for-Clunker’s program and rules to combat distracted driving.

LaHood reiterated that the administration’s priorities, revealed in last year’s stimulus bill and its 2011 budget request, include developing a national high-speed passenger rail network, an infrastructure bank to help finance projects, and so-called livable communities that reduce congestion by providing alternative modes of transportation such as street cars, transit and light rail. He also endorsed continuation of the department’s TIFIA infrastructure credit assistance program and the Build America Bonds program, which was part of last year’s massive stimulus plan.

The bonds were initiated to help states and local governments with infrastructure projects at a time when municipal bond markets had seized up. The bonds give issuers a subsidy equal to 35 percent of their borrowing costs.

John Horsley, executive director of the American Association of State Highway and Transportation Officials, asked LaHood to make the temporary program permanent.

Treasury Department officials have indicated that the administration wants to give the popular program permanent status, expand its eligible uses and lower the level of rebate to 28 percent, according to a Reuters’ report in late January.

The secretary reassured the state officials, who increasingly are expanding their focus beyond simply paving and maintaining roads, that the administration’s attention to other modes doesn’t mean highway investment will be ignored.

“We can do both and have a good mix of both,” he said.

LaHood painted a positive picture for infrastructure, despite estimates that hundreds of billions of dollars are needed to return bridges, roads and rail systems to a state of good repair. He pointed as evidence to the confluence of the American Recover and Reinvestment Act dedicated to transportation infrastructure, the likely passage of a jobs bill that contains more money for infrastructure, the upcoming award of $2.5 billion in high-speed passenger rail grants, anticipated expenditures from the current budget and progress towards reauthorization.

And, he said, the DOT plans very soon to put out guidance for the $600 million in TIGER grants in the current budget. The first round of discretionary grants for innovative multimodal projects, worth $1.5 billion, was issued last month.

“It doesn’t get any better than that, I don’t think,” he said.

Source: American Shipper